Problem - Edison Company manufactures wool blankets and accounts for product costs using process costing. The following information is available regarding its May inventories.
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Beginning
Inventory
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Ending
Inventory
|
|
Raw materials inventory
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$28,000
|
$25,500
|
|
Goods in process inventory
|
220,750
|
252,000
|
|
Finished goods inventory
|
319,000
|
277,000
|
The following additional information describes the company's production activities for May.
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Raw materials purchases (on credit)
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$135,000
|
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Factory payroll cost (paid in cash)
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791,500
|
|
Other overhead cost (Other Accounts credited)
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43,000
|
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Materials used
|
|
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Direct
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$93,500
|
|
Indirect
|
31,000
|
|
Labor used
|
|
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Direct
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$352,000
|
|
Indirect
|
439,500
|
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Overhead rate as a percent of direct labor
|
110%
|
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Sales (on credit)
|
$1,500,000
|
Required -
(a) Prepare journal entry dated May 31 to record the raw materials purchases.
(b) Prepare journal entry dated May 31 to record the direct materials usage.
(c) Prepare journal entry dated May 31 to record the indirect materials usage.
(d) Prepare journal entry dated May 31 to record the payroll costs.
(e) Prepare journal entry dated May 31 to record the direct labor costs.
(f) Prepare journal entry dated May 31 to record the indirect labor costs.
(g) Prepare journal entry dated May 31 to record the other overhead costs.
(h) Prepare journal entry dated May 31 to record the overhead applied.
(i) Prepare journal entry dated May 31 to record the goods transferred from production to finished goods.
(j) Prepare journal entry dated May 31 to record the sale of finished goods.